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30% Cable-Ownership Cap May Make FCC’s Dec. 18 Meeting Agenda

Federal Communications Commission chairman Kevin Martin circulated a list of items on the agenda for the agency’s Dec. 18 public meeting that includes a vote to cap the size of cable companies to 30% of subscribers.

Sources confirmed that the 30% cap was among a raft of possible agenda items circulated to the commissioners three weeks before the next open meeting.

This doesn't mean that it will necessarily make the official agenda, however, which won't be released until one week before the meeting, or that it won't be pulled if it does make it that far. But FCC Democrats are on the record as concerned about cable's market power, as they are about media power in general, and Martin teamed up with his two opposite-party critics this week to toughen leased-access rules for cable.

The possible agenda items were drawn from among the 100-plus items that have been on circulation to the other commissioners for a vote for more than six months.

In fact, the 30% cap proposal dates back from at least March, when an FCC aide identified it as one of dozens of items sent to the commissioners by the chairman.

Comcast, the nation's largest cable operator, currently reaches about 27% of all multichannel video subscribers, but that will likely go down a half million or so subs after it unwinds a partnership with Insight Communications.

Responding to the news that the cap could made the agenda, said Comcast Corp. Executive VP David Cohen.

"We believe that the record in front of the FCC provides little support for a cable ownership cap at any level and absolutely no support for a cap of 30%.  A horizontal cable ownership cap is something that both Comcast and the National Cable Telecommunications Association have long opposed, and that position has been supported by the courts.  In an era of increased and intensifying competition among telephone, satellite and cable companies, the case for a cap is even weaker than when the courts rejected it six years ago.”

 “The contemplated action by the FCC is perplexing in that only last year, the same Commission approved the largest telecommunications deal in history with the AT&T merger, as well as two other Bell Company mega-mergers in the past three years.  Against the backdrop of these decisions that have strengthened the hands of our Bell competitors, it is unthinkable that the government would constrain the ability of cable companies like Comcast to compete with these colossal companies that have virtually unlimited financial resources.  In fact, AT&T alone has a market capitalization of $231 billion -- larger than the entire cable industry combined."

Martin earlier this week was prepared to approve a report finding that cable's market power had reached a legal trigger for possible new regulation, but he had to amend that due to questions over the data used to arrive at that finding.

But the FCC still has power to regulate the cable industry without that finding, including setting the cap.

Martin has said that he wants to vote on an item that would loosen the broadcast-newspaper cross-ownership cap and, if he has his way, end the years-long review of media-ownership rules and rule changes required by Congress and a federal appeals court. He may want to do the cap vote, since it is an ownership issue, at the same time.

Martin is currently preparing to testify at a House Energy & Commerce Committee hearing Dec. 5, called in an effort to slow down that vote on the media-ownership item. A second hearing is scheduled in the Senate Commerce Committee for the next week, while a bill that would block Martin from a Dec. 18 ownership vote on the newspaper-broadcast ban is being marked up next week in that same Senate Commerce Committee.